How COVID-19 Has Impacted the Baltimore Rental Market

Question

Hey all,

I'm curious how the pandemic is affecting your rental portfolios - whether positively or negatively.

I'm currently only room-hacking a SFH in Riverside, so my tenants are also people I've developed a strong friendship with, but in my case COVID has not disrupted anything in the least.

It is actually the lease-renewal window for all of them, and each of them chose to renew as well as accept a rent increase. Is anyone else seeing normal movement upward like this for cashflow?

If not, how is COVID affecting you?

Tim Robinson · Answer

I have a triplex in Bolton Hill that I was really worried about a couple of the tenants making rent. Luckily (knock on wood), just one of the tenants even asked for an extension and that was only for a few extra days. I'm always a big fan of a pleasant surprise, and this was a great one. I have a couple of properties in DC where I have never had any issues with tenants making rent, and they too have been (thankfully) unaffected by COVID-19...so far. All things considered, seems we've all been quite fortunate:)

Solomon Morris · Answer

I have one tenant opting to leave one of my properties needing a bigger space here in two months (sad to see him go) and leased another one of my units I just finished renovating.  I feel blessed to say I received all rent as scheduled thus far but awesome to hear others are also doing well

Connor Corkrin · Answer

Solomon - Glad to hear you're doing well, I'm definitely grateful as well! I'm definitely looking forward to seeing how this all shakes out in either direction, seeing as we haven't seen such an economic fallout due to completely external forces in our history.

Daniel - That makes sense, it seems like it's oftentimes a struggle to make sure you come into a situation where there was a preexisting relationship/agreement, and ensuring you have a full understanding in order to fully follow through.

Daniel Suarez · Answer

Do you think those problem tenants were just able to present a stronger image when you screened them?

I think that's the case mostly. In all cases the income was enough, the references were good but the credit score was very low, but I felt that was the case mostly.

In regards to your signing the new lease with the stipulations on non-payment actions, what were the previous conditions set for that situation? The lease pretty much states that, but since they have been long term tenants and I had no experience at the time i didn't follow through.

Tim Youse · Answer

I'm curious to see how things are going to pan out on the lending side with more banks opting out of cash-out refis and fewer lenders doing LLC loans or raising their rates.

Daniel Suarez · Answer

It's been hit or miss for you. I have 8 properties in Baltimore county between Middle River and and Dundalk.

3 have paid on time (2 of them section 8). 1 has been on time, but I had to give her a 35% reduction due to her not having a job anymore, but will be back to normal rate by July. 1 is a model home that I get rent every month from Ryan Homes so no problem there. 1 Is a tenant that hasn't paid in about 2 months but is leaving by the end of April, will set a payment plan for her once she moves (or sent to small claims/collection if she doesn't)

2 are long term problem givers. 1 paid for the last 2 months and is now up to date. I'm signing a new lease with him with the condition that I will be more strict (no rent raise unless he's more than twice late and eviction starts if he doesn't pay by the 15th)

The other one is someone that also owns money, she was late by 2 days with no reply so i had to start eviction. Know waiting to see if she will pay her remaining balance or if eviction will go through.

All on all, seems like COVID itself has nothing to do with the condition of any of my tenants except for one

Connor Corkrin · Answer

That's awesome to hear Tim, I feel that (at least initially..time will tell depending on how long this lasts) the rental market hasn't been insanely devastated. We'll see as time goes on though.

Connor Corkrin · Answer

Good point - I remember seeing the Fed stated it's going to keep rates super low "until the economy has recovered," so I'm also curious to see how the impacts the bank's lending risk tolerance

Connor Corkrin · Answer

Gotcha - Appreciate that input Daniel.

Interesting that it seems to not have had too much of an impact, but instead maybe help you see some of the problem tenants more clearly.

Do you think those problem tenants were just able to present a stronger image when you screened them?

In regards to your signing the new lease with the stipulations on non-payment actions, what were the previous conditions set for that situation?

How COVID-19 Has Impacted the Baltimore Rental Market

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